On January 21, 2024, Carlos prepaid $7,200 for pet care services to be provided each Friday for 8 weeks for his Golden Retriever,
Bella. Mookie The Beagle Concierge recorded the entire $7,200 as Sales. At the end of the accounting period on January 31, 3 weeks
(01/12, 01/19, 01/26) of the pet care services had been provided to Bella, so 5 weeks of services or $4,500 ($7,200 \div 8 = $900 per
week) had not been earned as of the end of January. Since $4,500 has not been earned, the $4,500 is a liability because Mookie The
Beagle Concierge has an obligation to provide the pet care service or return the $4,500 to the customer. So an adjusting entry is
needed to bring accounts up to date at January 31.
